By Marco BösingWhat Are Loss Offset Rules?
Loss offset rules define how losses from capital investments can be set against gains for tax purposes, reducing the overall tax burden. For traders, this means losses from one trade can be offset against profits from other trades, so that only the net gain is taxed.
An important distinction is the separation of loss pools: losses from stock sales can only be offset against gains from stock sales. Losses from other capital investments (e.g., ETFs, bonds, derivatives) fall into the general loss pool and can be offset against all capital income except stock gains. Unrecovered losses are automatically carried forward to subsequent years.
From 2021 to 2024, a controversial loss offset restriction for derivatives (Termingeschaefte -- futures, options, CFDs) was in place, capping deductible losses at 20,000 euros per year. The German Federal Fiscal Court (Bundesfinanzhof) ruled this restriction unconstitutional, and it was abolished. Losses from derivatives can now be fully offset again.